National
Government Expects Higher Urea Subsidy Outgo in FY27
The Centre’s fertiliser subsidy bill for the financial year 2026-27 may rise by as much as Rs 70,000 crore to approximately Rs 2.41 lakh crore due to increasing import costs of urea and other fertilisers amid the ongoing crisis in West Asia, a senior government official said on Monday.
Speaking on the sidelines of an inter-ministerial briefing on developments in West Asia, Aparna S Sharma said the subsidy burden is expected to increase.
“The subsidy bill will go up, but what percentage is something I cannot say,” Sharma stated.
When asked whether the increase could reach around Rs 70,000 crore, she responded, “may be.”
India relies heavily on imports for fertiliser requirements, particularly urea and key raw materials used in fertiliser production.
Officials said disruptions in global energy markets and supply chains caused by geopolitical tensions in West Asia have pushed up international prices of natural gas, fertilisers, and shipping costs.
The rise in subsidy expenditure could place additional pressure on government finances, as the Centre continues to provide fertilisers to farmers at controlled and subsidised prices.
Higher crude oil and gas prices also impact fertiliser manufacturing costs because natural gas is a key input for urea production.
The developments come amid broader concerns over inflationary pressures and supply disruptions caused by instability in major energy-producing regions.
The government has maintained that ensuring uninterrupted fertiliser availability for farmers remains a priority despite rising global prices.